#FedRateCutAffectsDollarTrend The Federal Reserve's interest rate decisions have a significant impact on the U.S. dollar trend. Here’s how: 1. Higher Interest Rates → Stronger Dollar When the Fed raises rates, U.S. bonds and assets offer higher yields. This attracts foreign investors, increasing demand for dollars. As a result, the dollar appreciates. 2. Lower Interest Rates → Weaker Dollar When the Fed cuts rates, U.S. assets become less attractive. Investors seek higher returns elsewhere, reducing demand for dollars. This leads to dollar depreciation. 3. Market Expectations Matter If traders expect future rate hikes, the dollar may rise in advance. If the Fed signals future rate cuts, the dollar may fall before the actual cut. Current Outlook (2024-2025) The Fed has been signaling rate cuts in 2024 due to slowing inflation. If cuts happen, the dollar may weaken in the long run. However, if inflation remains sticky, fewer cuts could keep the dollar strong.